Geopolitical worries are starting to sew fear in the markets. The London terrorist attacks ahead of this week’s British elections, as well as diplomatic sparring in the Middle East, are putting a jolt into the CBOE Volatility Index (VIX), and sending investors out of broader stocks and into more safe-haven assets.
As a result, gold is in focus Tuesday morning … but a couple of companies also have earned the spotlight this morning, including Apple Inc. (NASDAQ:AAPL) following a full slate at its WWDC developers conference, and Tesla Inc (NASDAQ:TSLA), which is running into resistance despite a fresh bullish driver.
Here’s what you need to know heading into today.
Direxion Daily Gold Miners Bull 3X ETF (NUGT)
The Direxion Shares Exchange Traded Fund Trust (NYSEARCA:NUGT) is getting a boost this morning as investors flood into gold.
Gold prices hit six-week highs on Monday in reaction to slowing U.S. jobs growth, and continued rising in overseas trade overnight. The reaction is being sparked by the uncertainty over Britain’s upcoming elections, where Prime Minister Theresa May has watched her lead over the Labour Party slim to just 1%, as well as hesitancy heading into this Thursday’s testimony by former FBI director James Comey in front of the Senate Intelligence Committee.
That testimony is expected to cover interactions with President Donald Trump about the FBI’s investigations into whether Trump’s campaign colluded with Russians.
Spot gold peaked at $1,289.67 per ounce to hit its highest price since April 19. Meanwhile, NUGT — a bullish 3x leveraged play on gold — is up about 4% in Tuesday’s trade.
Apple Inc. (AAPL)
AAPL stock is continuing to give up ground in the wake of an analyst downgrade Monday, as well as yesterday afternoon’s WWDC event, where Apple unveiled its first new product line in three years, as well as a number of much-anticipated updates.
The big news was Apple’s reveal of the HomePod — a smart speaker powered by Siri that is expected to compete with the likes of Amazon.com, Inc.’s (NASDAQ:AMZN) Echo and Alphabet Inc’s (NASDAQ:GOOGL) Google Home.
The HomePod’s specs include high-performance audio, including real-time acoustic modeling, and will integrates with Apple Music as well as Apple HomeKit. In other words, HomePod won’t just be a music player, but can actually control aspects of the home, such as lights or the thermostat.
Among Apple’s other announcements: Updates to the iMac, MacBook and MacBook Pro, a new iMac Pro, a new iPad Pro, and massive updates to its operating systems.
However, the bad taste in investors’ mouths is coming from a downgrade by Pacific Crest’s Andy Hargreaves, which sees AAPL falling by single digits over the next year or so thanks to the market’s refusal to price in several risks, including supply issues for the upcoming 10th-anniversary iPhone.
AAPL stock is off fractionally today, and remains about 2% off all-time highs set in May.
Tesla Inc (TSLA)
Lastly, TSLA stock received an price-target upgrade on Tuesday, but that came amid a not-entirely bullish note, and is running into resistance that might suggest that the EV automaker’s shares are running out of steam.
Pacific Crest just raised its price target on Tesla to $439 per share, implying an additional 27% or so of upside from Monday’s closing price.
Analysts Brad Erickson and Elliot Arnson like the low downside risk in Tesla shares at the moment thanks to “already-low” expectations for 2017 deliveries of the Model 3, which will be launched in July. “Perception of future demand is as important as actual deliveries (maybe more important),” they wrote in a Tuesday note. “If the car is perceived as awesome, already-low 2H17 buy-side expectations will actually fall.”
However, Pacific Crest maintained its “Sector Weight” rating on Tesla stock, believing that a returned investor focus to profitability won’t do the company any favors down the road.
After a couple of trading days’ worth of rest, TSLA stock popped to fresh all-time highs on Monday, but are retreating fractionally in Tuesday’s premarket trade.
As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.
